Cut to coronavirus supplement will push 80,000 children into poverty

Before the pandemic hit, 774,000 Australian children were living in poverty. With many more individuals and families suddenly at risk due to COVID-19, the government provided a much needed, albeit temporary boost to social security payments of $550 per fortnight. This has lifted the incomes of hundreds of thousands of people above the poverty line and inspired hope that government is acknowledging the inadequacy of many social security payment rates.

Unfortunately, government announcements this week have not delivered a permanent increase to JobSeeker, Youth Allowance and other payments, instead cutting this vital support in September. As the peak body for child and family services in Victoria, the Centre for Excellence in Child and Family Welfare is very concerned that the coronavirus supplement, which effectively doubled the JobSeeker Payment, will be reduced from $550 to $250 per fortnight from 25 September.

Modelling released today by The Australia Institute shows that this $300 reduction will see 370,000 Australians, including 80,000 children, pushed into poverty. Victoria will be the hardest hit, with 123,000 people, including 29,000 Victorian children, living in poverty. This is unconscionable in the face of evidence that family poverty and financial stress have significant adverse impacts on children’s development, wellbeing and future outcomes.

The government has justified this cut by increasing the amount people can earn from income before their payments are affected to $300 per fortnight, however given the scarcity of jobs, very few people will be able to maintain their household income in this way.

The current rate of unemployment payments, which have not been increased in 26 years, does not meet the basic living needs of Australians, many of whom are unable to afford regular meals and the costs of education for their children. COVID-19 has shown that Australia can afford to provide an adequate level of support. By withdrawing this, we are failing in our human rights obligations.

The Treasurer stated that 2 million Australians are currently being supported by the coronavirus supplement, and government estimates that 2.3 million will be receiving it by September. The government’s economic recovery plan relies in part on rising household consumption, and yet it is cutting spending capacity for those whose low income is directed to the purchase of essential goods and services.

The 550 Reasons to Smile campaign has shown parents using their supplement to buy warm winter clothes for their children, to feed the whole family regular meals and to participate in special family moments by being able to afford a birthday present and a cake for their child. For families who are just getting by, a $300 reduction will mean skipped meals and unpaid bills.

The Centre is calling on government to extend the coronavirus supplement at its current rate of $550 per fortnight until the pandemic is over and to introduce a permanent increase to social security payments sufficient to lift incomes above the poverty line.

Everyone has the right to a life free from poverty. An adequate standard of living, which enables access to an essential level of benefits provides a critical foundation for improving the lives of children, young people and families experiencing disadvantage. We cannot accept our government condemning children to poverty.

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